Car industry risks £4.5 billion Brexit bill

The UK government should immediately focus on post-Brexit priorities for the automotive industry or the sector’s considerable recent success story will be at risk, the president of trade body the Society of Motor Manufacturers and Traders (SMMT) has warned.

British car buyers could also face much higher prices in showrooms.

Speaking at the organisation’s 100th annual dinner in London, Gareth Jones revealed the British motor industry faced a £4.5 billion Brexit ‘double whammy’ bill if single market access is not secured once Britain leaves the European Union.

This could comprise EU tariffs of at least £2.7 billion on cars imported to the UK, and £1.8 billion on automotive exports.

It risked adding an average of £1,500 to the price of an imported new car: many best-selling models in the UK, such as the Ford Fiesta, Vauxhall Corsa and Volkswagen Golf, are built in Europe and imported into the UK.

‘Don’t take today’s boom for granted’

The British automotive industry is booming at the moment, said Jones. 2016 is likely to set a record for exports and also top 2015’s hefty production volumes. This, however, is the result of investment decisions made years before the vote to leave the European Union, warned Jones.

Success thus cannot be taken for granted. “The renaissance is down to years of hard work, hard won investment and long-term collaborative partnership between industry and government… We operate in an intensely competitive environment.”

SMMT members are clear on what they want: membership of the single market, consistent regulations, access to skilled workers globally and international trade free from barriers and red tape.

“This won’t be easy,” said Jones. “There will be competing priorities. But be assured, as the negotiating positions harden, SMMT will continue to make this case to government.”

And the automotive industry’s current strength, he added, should ensure such demands are heard.